On D ecember 27, 2025, China unveiled a New ly Revised Draft Trademark Law (“New Trademark Law”) for public comments for a period of 45 days, namely, from December 27, 2025, to February 9, 2026. This was a sweeping legislative overhaul that targets the ecosystem of bad faith with unprecedented force. The New Trademark Law declares war on the toxic tactics that have trapped countless brands, such as predatory squatting, industrial -scale hoarding, and the doubleedged sword of weak infringement enforcement coupled with abusive litigation.
Why the World's Largest Trademark Registry
is Getting a Hostile Makeover?
You may have learned, in the past decades, for global brands, China's trademark system has long been a treacherous battleground, where squatting on a celebrity’s name or hoarding hundreds of unused trademarks has been a lucrative game. The rampant practice of squatting has been a costly rite of passage. By squatting, speculators may preemptively China’s War on register a foreign company's name as a trademark or just the trademarks of the company directly, which may constitute an obstacle to foreign brands to come to China. If you have learned this, you may know the answer to the question.
The game will be facing a brutal shutdown.
The New Trademark Law is not a minor tweak but a fundamental paradigm shift. It signals China's move to more closely align its IP regime with global business norms and decisively protect bona fide innovation.
For international executives and legal teams, understanding this shift is nonnegotiable.
During the period of 45 days for public comments, 411 participants from all walks of life provided 916 comments or opinions.
The New Trademark Law will be adopted soon with further discussion and review for adoption or not of these public comments, the landscape will be set for a historic transformation.
The Old Rules is a Hazard to Global Business
For years, entering the Chinese market meant navigating a legal minefield largely unseen in other major economies for the following reasons. To some extent, we may say it is a hazard to global business under the old rules of o ld China trademark law.
The Squatter's Trap
Upon announcing expansion plans, foreign brands, especially, famous brands, would often discover their own name or trademarks already registered by local speculators. These trademark pirates operated with impunity, holding brands hostage for exorbitant payouts.
Famous cases, like the scramble to register the Olympic mascot “Bing Dwen Dwen ” highlighted a systemic flaw that treated trademarks as speculative commodities rather than badges of origin.
The Hoarding Glut
The sheer volume of registrations of over 45 million trademarks was inflated by entities filing hundreds of applications with no commercial intent to use the trademarks in commercial activities.
This artificial scarcity created a barrier to entry, forcing legitimate businesses into lengthy opposition or cancellation proceedings just to claim their own brand identity. However, the results of such proceedings may not be that fruitful.
The Enforcement Paradox
The system presented a frustrating contradiction. While counterfeiting remained rampant with often ineffectively low penalties, the law could also be hijacked for harassment through groundless, malicious lawsuits against competitors or distributors. This has created a climate of legal uncertainty and risk for foreign investors or enterprises.
The New Trademark Law will be the new arsenal of China's legal counterstrike
( Source: Unsplash.com) The New Trademark Law to be adopted soon after for public comments equips authorities with powerful new tools to purge the system and reset expectations.
The cornerstone is a new fundamental principle set in Article 18 of the New Trademark Law: “Applications filed not for the purpose of use, the quantity of applications obviously far more than what may be used for normal business, shall not be registered”.
This moves China closer to the philosophy of “use it” or “lose it,” as common in other jurisdictions, directly attacking the business model of squatters at the source.
Most of the time, squatters may not use the trademarks they registered, or the quantity of applications of trademarks are obviously far more than what may be used for normal business. So, squatters may face the risk of losing the trademarks they have registered.
Severe Penalties
The financial stakes for bad faith have skyrocketed. According to Article 53 of the New Trademark Law, malicious applicants without the purpose of use of trademarks in commercial activities may face fines up to RMB 100,000 (approx. $14,000 USD).
According to Article 60, complicit trademark agencies may risk penalties up to RMB 200,000 (approx. $28,000 USD).
Proactive Purge
Authorities will no longer wait for victimized companies to act. According to Article 56 of the New Trademark Law, authorities gain the power to proactively cancel trademarks that have become generic or are left unused for three consecutive years, clearing “deadwood” from the registry.
With sharper teeth and stricter boundaries, the New Trademark Law will rebalance the enforcement while seeking to strengthen protection for real rights while curbing legal abuse.
According to Article 74, it refines rules for evidence collection and preservation and aims to make damage awards in infringement cases more compensatory and deterrent, including clearer application of punitive damages.
According to Article 78, a critical new provision allows victims of “malicious litigation” to sue for losses, creating a powerful disincentive against launching frivolous legal threats.
It will Modernize Protectable Assets.
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The New Trademark Law acknowledges digital branding. According to Article 14, the New Trademark Law now formally recognizes “dynamic marks” (e.g., motion logos, micro -animations) as registrable assets as trademarks.
In accordance with Article 2, this reform is part of a top-level strategic pivot, which integrates trademark policy into China's National IP and Innovation Strategy. Enforcement is being streamlined into a coordinated, cross - agency campaign.
For the whole global business community, the New Trademark Law is a powerful and welcome correction. It reduces a major non -commercial risk and lowers the cost of market entry. The path forward requires a strategic shift, namely, treat your Chinese trademark portfolio not as a defensive legal formality, but as an active, evidence-based commercial asset.
Based on our experience, as the New Trademark Law will be adopted soon after public comments, we recommend that international companies take immediate action as priorities so your brands may be protected better in China on the strategic rationale of the New Trademark Law.
Auditing & Securing Your Portfolio
The new “good faith” standard favors thosewho can demonstrate a clear use intent incommercial activities. Proactive filing is stil l crucial but now must be justifiable. So, you need to conduct an urgent review of your China TM portfolio and registration strategy, and file for key marks before expansion of your business to China.
Fortifying Your Evidence
Proof of genuine “purpose of use” is now your most valuable legal asset in both registration and enforcement. So, it is important to meticulously document brand development plans, marketing materials, and sales data for China with evidence such as f āpiào 发票 (commercial invoices).
Reclaiming Hijacked Assets
The legal and political wind is now at your back. Authorities are mandated to clear bad faith registrations, so you need to re -evaluate cases where your brand was squatted. Consider re-filing invalidation or cancellation actions under the new, more favorable legal framework.
Vetting Local Partners & Counsel The New Trademark Law targets malicious agencies. Partner with firms that align with the new “good faith” ethos. It is critical one ensures one’s local trademark agents have robust compliance procedures to avoid new,
Severe Penalties
for handling bad faith filings.
Play the new game and navigate the New Era
All in all, the New Trademark Law is a watershed moment for global IP strategy. It represents a decisive effort to dismantle a shadow industry of speculation and build a more transparent, predictable, and fair system. The wild west is closing. The rules have been rewritten. Play the new game and navigate the New Era.